Power of Attorney (POA)-an Attorney Cannot Sell to Himself or Herself Using POA

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Power of Attorney (POA)-an Attorney Cannot Sell to Himself or Herself Using POA

In Accordance with Section 27 of Property Law Act of BC

“An attorney cannot sell transfer our charge of parcel of property in favour of himself or herself, and any such transfer or charge is deemed not valid unless the power of attorney expressly authorizes it, or the principal ratifies it”

This further illustrates a fiduciary duty owed by an Attorney to the Donor in a Power of Attorney. A fiduciary duty is a legal duty where one person (the “fiduciary”) must act in the best interests of the Donor. Trust lies at the heart of the fiduciary relationship. The Donor trusts that the fiduciary (Attorney) will act in good faith.

It is well established that the attorney acting under a power of attorney is bound to the duties enunciated on the face of the instrument granting the power i.e. Section 20 of Power of Attorney Act of BC. In most cases, the power of attorney remains exercisable during periods of capacity and mental infirmity. Condition stipulated in Section 19(d) of Power of Attorney Act requires the attorneys to provide the donor with regular accountings at any time they assist him in his financial affairs.

In cases, where the transfer of property has been to spouse of the Attorney, the court has ruled against the same and has argued that even though the transaction is not equivalent to the transfer to the Attorney but did point to the applicability of Section 27 of the Property Law Act of BC. It was also pointed out powers vested under the Power of Attorney Act do not authorise the Attorney to disburse/dispose or grant donors property without consideration (Trevor Todd’s blog on his website quotes Begley v. Imperial Bank of Canada (1934), [1935] S.C.R. 89 (S.C.C.), aff’d [1936] 2 All E.R. 367 (Canada P.C.) to illustrate the same). Section 19(3) of the Power of Attorney Act illustrates amply that unless it is in the interest of the Attorney such an action must not be taken.

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